Michael Wolff on the Murdoch Father-Sons Feud Over Fox News Post-Roger Ailes
Rupert Murdoch is in charge, but his promotion of two network veterans despite a widening harassment probe (and over his sons' doubts) belies big changes coming as James and Lachlan see the future of cable news in CNN (and Jeff Zucker in Ailes' spot?)
Fascinated by its growing influence and low-cost structure, and noting the flakiness of its owner, Ted Turner, Rupert Murdoch made several attempts to buy CNN between 1993 and 1995. Rebuffed by Turner, who thought as little of Murdoch as Murdoch thought of him, CNN was sold to Time Warner in 1996. In something of a this-is-war huff, Murdoch vowed to start his own cable news network.
Fox News, launched that year, was not meant to be the right-wing lightning rod that it became under Roger Ailes. It was originally meant to compete with CNN for influence, stature and viewers in the new cable news business.
Forsaking establishment cred, the new network, in Ailes' aggressive bid for an under-served right-wing audience, went on to clobber CNN in ratings and profits. But 20 years later, CNN is again becoming the model for Murdoch's sons, Lachlan and James, as they envision a post-Ailes world. CNN's current chief, Jeff Zucker, is even said among industry insiders to be one of the sons' top choices to take over at Fox News.
In part this reflects the Murdoch sons' view of the future of 21st Century Fox as a modern, multiplatform content and distribution company, one without their father's political stain. (With the Murdoch newspapers and their ideological views split off from 21st Century Fox in 2013 — partly at the urging of the Murdoch sons — that leaves only Fox News as a political presence in the company.)
And it reflects, after more than a decade in the doldrums, a resurgence of CNN under Zucker, who took the reins in 2012. Most of all though, it reflects a belief that there isn't anybody with Ailes' politics from inside or outside the network whom Lachlan and James — 44 and 43, respectively, youthful globalist moderates largely living in an anti-Fox world — could work with or even tolerate.
The transition now is an awkward or floundering one. Murdoch senior, blocking or tempering his son James' desire to jump in and start remaking the network, took the interim oversight job for himself. Overriding his sons' doubts, particularly those of James, on Aug. 12 Murdoch elevated, under the cover of a summer Friday press release, Ailes lieutenants Bill Shine and Jack Abernethy to the top jobs — even as the internal investigation of alleged sexual harassment and victim payouts continues to taint the old guard management ranks. Shine, who will oversee Fox News programming, and Abernethy, who will manage the business side — roles once held jointly by Ailes — report directly to Rupert, who has extended his operational authority reportedly at least through the election.
Ailes, flanked by Fox 5 New York anchor Rosanna Scotto (left) and Fox News host Jeanine Pirro in 2014.
In his 65-year media career, the senior Murdoch, now 85, only ever has had limited involvement or interest in television news programming — indeed, never, in Ailes' telling, has Murdoch had a programming view. Now a daily presence at Fox News, camping out in Ailes' office on the second floor of the Fox building in New York, Murdoch has been offering much the same advice he offers all his newspapers: more and shorter stories.
James Murdoch, on the other hand, has a lot of TV news experience. Sky News in the U.K., under his oversight as BSkyB CEO from 2003 to 2007, was an aggressive BBC competitor, a tad right of the BBC perhaps, but self-consciously objective and decidedly not Fox News — CNN in its Turner incarnation was something of its model. James, as part of the broader next-generation remodel of his father's company, continues to advocate for purchasing the 61 percent of Sky that 21st Century Fox doesn't own, thereby consolidating the two companies and, potentially — and in CNN fashion — creating a global television news operation (Sky also includes Sky Italia and Sky Deutschland).
Lachlan Murdoch, his brother's equal as one of two top executives at the company but mindful of the ultimate bake-off for the supreme job, has publicly weighed in on Fox News, advocating his father's preference for trying to preserve the network's "unique" conservative tilt. But there's conservatism as in the Murdoch family's free-market views, and then there's the much-harder-to-swallow Roger Ailes conservatism represented by personalities like Bill O'Reilly and Sean Hannity — as distasteful to the Murdoch sons as Ailes himself was.
The internal business view at 21st Century Fox is that Fox News' distribution agreements and brand strength mean it will be able to maintain its wide profit margins over CNN for the foreseeable future. But at the same time, the belief, most forcefully expressed by James, is that CNN's digital business — now among the most successful digital news outlets — has far outstripped Fox's relatively slow-moving digital efforts under Ailes and is vastly better positioned for the news-platform battles to come. Another component of that battle, an important aspect of digital dominance, is an aggressive breaking-news capability — a CNN strength and relative Fox weaknesses. Fox, in this view, might preserve its ratings-winning conservative voices — and as well contain them amid a lineup of more balanced programming — while going after CNN's advantages, too.
Hence, why not hire Zucker, who has guided CNN's digital strategy and driven the network to its strongest competitive point against Fox in years? According to insiders, Zucker makes far less in salary at CNN than the $20 million that Ailes reportedly made at Fox News and, irksomely, he doesn't have the access to the Time Warner company plane that other top execs enjoy. Fox, with profits as much as three times greater than CNN's, could presumably offer him a much richer deal.
Zucker colleagues say there are no discussions underway with Fox, his CNN contract has another year to run, and, anyway, he would never do it. To boot, any offer from Fox gives Zucker an opportunity to push for the job he is said to really want, which is to replace Jeffrey Bewkes as CEO of Time Warner when Bewkes retires in the next few years. This, however, in the "we can do anything, we're change agents" Murdoch sons' world, has given rise to talk of another bid by 21st Century Fox for Time Warner — thereby getting not only Zucker but, finally, CNN, too.
But beyond that corporate deja vu, there is, more ominously, a fear of going back down another road. The decision, advocated most strenuously by James, to bring in an outside law firm to conduct an independent investigation of Ailes, now seems to be mushrooming into a wider indictment of not only Fox News but of the parent company's oversight, with additional current and former female employees at the network continuing to come forward, Cosby-style, each seeming to further implicate Fox News executives in whom Rupert has just placed a vote of confidence. This is eerily similar to where the company and Murdoch family found itself in 2011, having turned a blind eye to illegal behavior at its hugely profitable and epochally sleazy tabloid, News of the World. The end result, advocated by James, then CEO of the London-based operation, who found News of the World personally distasteful and who was largely held accountable for turning that blind eye, was to close the paper — much to his father's great grief.
It is the fear of Murdoch hands loyal to the father and deeply wary of the sons that what continues to play out is a clash of cultures wherein the old company must be chewed up and spit out to make way for the new. The old man resists. But his sons, not so patiently, are at the door.
Michael Wolff is the author of several books about the media, including a biography of Rupert Murdoch.
This story first appeared in the Aug. 26 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.